The search is the latest in a series of big-budget reviews among marketers in the hot category of direct-to-consumer drug advertising. This newest drug, which may augment the effect of cholesterol-lowering statins, will be co-marketed by Schering-Plough Corp. and Merck & Co., and is known by its generic name, ezetimibe. An unknown number of agencies have been dispatched to develop presentations on possible marketing plans, including prospective spending levels, and may make them before the end of the year, according to people with knowledge of the situation. A likely early task for the winner: help develop a consumer-friendly brand name.
Spending could eventually hover in the $50 million range as heavy support has become almost a prerequisite to compete in the cholesterol-lowering category. A Schering spokesman said the company generally does not comment on agency selection matters.
The new product, which is in clinical trials and has not been submitted to the U.S. Food & Drug Administration for approval, becomes the latest drug looking for an agency. Pfizer has five contenders for its $55 million Lipitor account while Bristol-Myers Squibb is down to two, DDB Corbett, Chicago, and Robert A. Becker, New York, for its $60 million Pravachol business. Also in play is AstraZeneca's superstatin, a drug not yet approved by the FDA. The review is down to three: KPR, New York; a joint effort between Lally McFarland & Pantello and Jorda McGrath Case & Partners/Euro RSCG, both New York; and CommonHealth's Quantum Group, Parsippany, N.J.
The AstraZeneca product, which likely will be billed as more effective than statins -- such as market leader Lipitor, No. 2 player Merck's Zocor and third-place Pravachol -- and thus a potential replacement for them, will take a different approach from the Schering/Merck product. (Zocor, which is not in review, is housed at Ogilvy & Mather Healthcare, New York.)
The new drug will be marketed at least partly as a complement to those already on the market. The product, which works differently than a statin and is billed as having fewer side effects, may reduce cholesterol levels an additional 18 to 20% below what statins already achieve.
But Schering/Merck will position ezetimibe as both a standalone product and something to be taken in combination with a statin; therefore it's expected to capitalize on joint marketing opportunities with Merck's Zocor. If the product is proven to provide significant additional benefits when taken with a statin, then Schering/Merck's potential market is huge considering the ever-increasing popularity of the drugs that generate billions in annual sales.
"The cholesterol market is a very big one in the United States," the Schering spokesman said, "and a growing market."
For Schering in particular, much rides on ezetimibe. The company has looked for alternate revenue streams as it faces the possible loss of profit from generic competition to allergy drug Claritin, though a next-generation drug expected to be called Clarinex could be a buffer.
"With the agreement with Merck, it definitely has a lot more potential than it did, but it's not going to be what carries the company," said Beth Cariello, an analyst with Deutsche Banc/Alex. Brown. "It's still going to be Claritin and its follow-up compound."
A separate agreement with Merck has the two companies working to develop a drug that combines Claritin and Merck asthma product Singulair to treat both conditions.
Schering and Merck's search for an agency for a product that likely won't hit the market before at least 2002 serves as another example of how early in the drug development process marketers begin the search for consumer agencies. The main reason: huge growth in direct-to-consumer advertising, which hit $1.8 billion in 1999, up 73% from 1997, according to IMS Health.